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More job cuts at Germany's RWE

German electricity giant RWE says it will cut 6,750 more jobs by 2016 because of falling earnings from its coal- and gas-fired plants. Wind and solar power generation now account for 25 percent of Germany's energy mix.

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Massiver Stellenabbau bei RWE

The German fossil-fuel power generator RWE announced a further workforce cut on Thursday. Instead of job terminations, the company will offer older staff partial retirement or alternative tasks, but the announcement hinted that outright layoffs could eventuate in 2014.

In a statement coinciding with lackluster third-quarter earnings figures, personnel chief Uwe Tigges said that because of energy market trends RWE could not extend an existing deal with trade unions to avoid layoffs beyond next year.

Worker representatives want the jobs-protection deal to be extended 10 years.

Job cuts through efficiences

The reductions outlined Thursday will reduce RWE's workforce Europe-wide from 67,400 to 60,700, with two-thirds within Germany. Starting in 2011, RWE had already trimmed 6,200 jobs.

The latest cuts will delete 2,300 jobs at the company's core power generation unit, 2,400 administrative jobs under its operational efficiencies scheme "RWE 2015", and 1,400 jobs through the planned sale of its vehicle fuel retailer DEA.

Its renewable energy subsidiary RWE Innogy will also lose 250 jobs.

Profit warning for 2014

In September, RWE had announced a halving of its dividend and foreshadowed job cuts in power plants, citing slowing usage of its gas- and hard-coal-fired power plants.

According to RWE, "despite a still difficult market environment," its operating profit for the first three quarters of 2013 was more or less stable at 4.6 billion euros ($6.2 billion), owing primarily to gas sales.

The company predicted a sharp fall in earnings and overall profit next year, "primarily in conventional electricity generation."

ipj/mkg (dpa, Reuters)

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